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China ups defence budget amid threats to Taiwan

BEIJING: China said on Monday it would boost its defence budget by 12.7 percent in 2000, pushing ahead with a military modernisation programme amid a new salvo of threats against Taiwan.

Finance Minister Xiang Huaicheng proposed boosting defence spending to a record 120.5 billion yuan ($14.56 billion).

The increase mainly covered salary raises for troops, and a garrison for the former Portuguese colony of Macau, which returned to Chinese rule in December last year, Xiang said.

But analysts said the budget, modest by international standards at just 1.35 percent of Gross Domestic Product, did not include key items like weapons procurements and research and development, which are hidden in other allocations.

Real defence spending could be three to 10 times higher, the analysts said.

"What they show is what they want you to know," said one Beijing-based Asian diplomat.

Ahead of Taiwan's presidential election on March 18, China has been threatening invasion if the island drags its heels indefinitely on reunification.

The Liberation Army Daily kept up the drumbeat on Monday, with an editorial saying the 2.5-million strong military stood ready to "resolutely smash" any move towards independence.

China regards Taiwan as a rogue province that must be reunified with the mainland.

STATE-OF-THE-ART EQUIPMENT

Analysts said China was expanding its naval and air capability to be able to project its power over Taiwan and, farther afield, the Spratly Islands in the South China Sea.

The Spratlys are a cluster of isles, reefs and rocky outcrops claimed partly or wholly by China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei.

Last month, China took delivery of a new Russian-built missile destroyer which passed through the Taiwan Strait on its way to the mainland.

"They're buying ships, they're buying electronics," said the diplomat.

"They're spending money in research and development of technology and on purchases of near state-of-the-art equipment which they probably feel they can't develop in any realistic time frame."

However, despite recent arms purchases and the latest growlings at Taiwan, defence analysts say China will not be capable of invading the island for most of this decade. "Most analysts believe the balance of power across the Taiwan Strait begins to shift in China's favour around 2010," said Robert Karniol, Asia-Pacific editor of Jane's Defence Weekly.

CHINA AIMS FOR GLOBAL POWER

He said China's military modernisation programme should be seen in a broader context.

The programme is one of Beijing's core long-term policies aimed at building China into a regional and then a global power.

"It isn't because China has ambitions to conquer the region or conquer the world necessarily, but rather to have a modern military force commensurate with its role and power on a region-wide and global level," Karniol said.

"China has understood that as part of efforts to professionalise the armed forces it is important to improve salaries of its soldiers."

The government has promised to compensate the army after ordering it to quit commercial operations in 1998.

Analysts said they expected China to continue expanding its defence budget and concealing the extent of its weapons purchases.

But for the moment, at least, they saw no immediate threat of an arms race across the continent.

"There is not a real arms race in Asia at present, rather the process is characterised as an arms buildup," said Karniol.

However, a U.S. proposal to set up a Theatre Missile Defence (TMD) system that Beijing fears would shelter Taiwan, could accelerate that buildup around the region, he said.

"That would, from the Chinese and Russian point of view, upset the balance of power and the consequences could potentially lead to an arms race." -Reuters